Garmin Ltd. on Wednesday reported a third-quarter net loss because of tax expenses, but revenue was sharply higher as demand surged for its fitness, outdoor and aviation products.
The company, which has its operating headquarters in Olathe, lost $146.8 million for the three months that ended Sept. 27, compared with a profit of $187.7 million in the third quarter last year.
The loss was due to a third-quarter income tax expense of $319 million, which included $308 million in tax expenses related to a corporate restructuring. Operating expenses also rose in the quarter by 11 percent.
Excluding the income tax expenses, Garmin said its pro forma earnings were 76 cents a share, compared with 69 cents a share in the third quarter last year.
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Garmin also raised its full-year earnings and revenue forecast based on its strong sales results.
Shares in Garmin closed at $53.96, down $3.24, or 5.66 percent.
“There was plenty to like in this quarter but not the monster … Garmin has delivered in recent quarters,” Wells Fargo Securities analyst Andrew Spinola said in a report after the earnings release.
The company reported third-quarter revenue of $706.3 million, up 10 percent from the third quarter last year, with double-digit sales growth in four of its five business segments.
Garmin’s sales were led by a 43 percent increase in its fitness business, which includes gear that monitors heartbeats and count calories. Garmin said it expects “strong sales in the holiday quarter and beyond” in this product line.
Spinola agreed with that assessment.
“Quarter four is shaping up to be a strong one in Garmin fitness, and nothing in this result changes our view,” he said.
Garmin also reported strong results in its aviation, marine and outdoor product lines.
Those gains more than offset a 5 percent decline in automotive and mobile personal navigation devices based on satellite positioning technology. That business has been eroding in recent years, but it still generated $307.6 million in third-quarter revenue, the highest total among Garmin’s product lines.